Just What Is OMVIC… and Why Am I Paying Them $10 When I Buy A Car?

Just What Is OMVIC… and Why Am I Paying Them $10 When I Buy A Car?

These are two questions dealers sometimes get asked when reviewing a vehicle purchase agreement with customers. And the answers are actually quite important – so, let’s tackle them one at a time.

WHAT IS OMVIC?
OMVIC (Ontario Motor Vehicle Industry Council) is Ontario’s vehicle sales regulator. With a mandate of protecting Ontario consumers, OMVIC enforces the provincial laws (Motor Vehicle Dealers Act and Consumer Protection Act) related to retail automotive sales on behalf of the Ministry of Government and Consumer Services. All motor vehicle dealers (new and used) and salespeople MUST be registered with OMVIC.

HOW DOES OMVIC PROTECT CONSUMERS?
Maintaining a fair and informed marketplace by protecting the rights of consumers, enhancing industry professionalism and ensuring fair, honest and open competition for registered motor vehicle dealers is OMVIC’s stated mission; and it’s a challenging one in the uber-competitive vehicle sales marketplace. But the regulator has earned a reputation for vigilance. “In 2014, OMVIC conducted 2475 inspections and 496 investigations,” explained Terry O’Keefe, OMVIC Director of Communications. “The investigations led to charges against 99 entities, about half of them curbsiders (illegal, unlicensed dealers).” A further 98 dealers were “disciplined” for breaches of OMVIC’s Code of Ethics – most related to advertising or disclosure offences. “That may seem like a lot of non-compliance, but when you consider Ontario dealers conducted 1.2 million vehicle transactions last year and OMVIC only received 1048 formal complaints, it’s actually quite a remarkably good statistic. The vast majority of registered dealers genuinely want to provide their customers with excellent products and service.”

OMVIC’s successes are not simply the result of regulatory enforcement; it accomplishes its mission utilizing diverse strategies and initiatives including:Maintaining strict dealer/salesperson registration requirements

According to George Iny, Executive Director of the consumer advocate Automobile Protection Association (APA), “Every aquarium needs a cleaner fish, and OMVIC does just that for auto retailing.”

WHAT IS THE $10 TRANSACTION FEE?
It may come as a surprise to learn – OMVIC receives no government funding. Its funding comes primarily from dealer and salesperson registration renewal fees; the transaction fee is part of the dealer’s renewal fee. Here’s how it works: registered dealers must pay OMVIC $10 for each vehicle they sell/lease retail (includes fleet and export transactions). This money is remitted annually along with the dealer’s regular renewal fee ($250).
While not all dealers pass the transaction fee on to their customers, it is allowed, and many do. Note: if a dealership intends to pass the transaction fee on to its customers, it must include the fee in its advertised prices.

Motor vehicle sales is a regulated industry in Ontario; the $10 transaction fee ensures the regulator has the resources required to carry out its mandate. Iny and the APA agree: “That ten dollars supports a large
variety of enforcement, education and standards development activities. The APA operates in several provinces and is well able to see the benefits that accrue from having an active regulator for car dealing.”